The comparative statements of financial position of Mikos Inc. as at December 31, 2020 and 2021...

   

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The comparative statements of financial position of Mikos Inc. as at December 31, 2020 and 2021 and its statement of earnings for the year ended December 31, 2021 are presented below: MIKOS INC. Comparative Statements of Financial Position Assets Cash December 31 Short-term investments Accounts receivable Inventories, at cost Prepaid expenses Land Property, plant, and equipment, net Intangible assets 2021 2020 $ 9,500 $ 17,500 53,500 26,500 70,500 28,000 55,000 40,500 4,500 7,000 47,000 72,500 282,000 181,500 24,500 29,000 $546,500 $402,500 Liabilities and Shareholders' Equity Accounts payable Income tax payable Accrued liabilities Long-term notes payable Contributed capital Retained earnings $ 17,500 $ 41,000 7,000 10,500 1,500 -0- 115,000 160,000 210,000 62,500 186,500 137,500 $546,500 $402,500 MIKOS INC. Statement of Earnings For the Year Ended December 31, 2021 Sales Cost of sales Amortization expense-intangible assets Depreciation expense-property, plant, and equipment Operating expenses Interest expense Earnings before income taxes Income tax expense Net earnings $865,000 $435,000 4,500 33,500 226,000 12,500 711,500 153,500 46,050 $107,450 Additional information is as follows: a. Land was sold for cash at its carrying amount. b. The short-term investments will mature in February 2022. c. Cash dividends were declared and paid in 2021. d. New equipment with a cost of $166,500 was purchased for cash, and old equipment was sold at its carrying amount. e. Long-term notes of $12,500 were paid in cash, and notes of $32,500 were converted to shares. Selected financial information for Frank Corporation is presented below. Selected 2020 transactions are as follows: a. Purchased investment securities for $6,800 cash. b. Borrowed $18,600 on a two-year, 8 percent interest-bearing note. c. During 2020, sold machinery for its carrying amount; received $13,700 in cash. d. Purchased machinery for $53,600; paid $10,800 in cash and signed a four-year note payable to the dealer for $42,800. e. Declared and paid a cash dividend of $11,800 on December 31, 2020. Selected account balances at December 31, 2019 and 2020 are as follows: December 31 2020 2019 Cash Accounts $88,600 $22,800 receivable 18,800 12,900 Inventory Accounts payable Accrued wages 53,800 63,600 8,800 13,600 payable 1,700 2,800 Income taxes payable 6,800 3,900 One-fourth of the sales and one-third of the purchases were made on credit. FRANK CORPORATION Statement of Earnings For the Year Ended December 31, 2020 Sales revenue Cost of sales Gross profit $436,000 286,000 150,000 Expenses Salaries and wages $52,800 Depreciation 11,000 Rent (no accruals) 7,600 Interest (no 14,000 accruals) Income tax 13,600 Total expenses 99,000 Net earnings $ 51,000 Required: 1. Prepare a statement of cash flows for the year ended December 31, 2020 by using the indirect method. (Negative answers should be indicated by a minus sign.) FRANK CORPORATION Statement of Cash Flows For the Year Ended December 31, 2020 Cash flows from operating activities: Add (deduct) items not affecting cash: Net cash flow from operating activities $ 0 Cash flows from investing activities: Net cash flow from investing activities 0 Cash flows from financing activities: Net cash inflow from financing activities Cash, beginning of 2020 Cash, end of 2020 0 0 $ 0 2. This part of the question is not part of your Connect assignment. 3. Compute the quality of earnings ratio and the capital expenditures ratio. (Enter your answers in numbers and not in percentages. Round the final answers to 2 decimal places.) Quality of earnings ratio Capital expenditures ratio Required: 1. Prepare a statement of cash flows for Mikos Inc. for the year ended December 31, 2021 by using the indirect method. (Negative answers should be indicated by a minus sign.) MIKOS INC. Statement of Cash Flows For the Year Ended December 31, 2021 Cash flows from operating activities: Adjustments to reconcile net earnings to net cash provided by operating activities: Net cash flow from operating activities Cash flows from investing activities: Net cash flow used for investing activities Cash flows from financing activities: Net cash flow from financing activities Cash and short-term investments, beginning of year Cash and short-term investments, end of year $ 0 0 0 0 $ 0 The comparative statements of financial position of Mikos Inc. as at December 31, 2020 and 2021 and its statement of earnings for the year ended December 31, 2021 are presented below: MIKOS INC. Comparative Statements of Financial Position Assets Cash December 31 Short-term investments Accounts receivable Inventories, at cost Prepaid expenses Land Property, plant, and equipment, net Intangible assets 2021 2020 $ 9,500 $ 17,500 53,500 26,500 70,500 28,000 55,000 40,500 4,500 7,000 47,000 72,500 282,000 181,500 24,500 29,000 $546,500 $402,500 Liabilities and Shareholders' Equity Accounts payable Income tax payable Accrued liabilities Long-term notes payable Contributed capital Retained earnings $ 17,500 $ 41,000 7,000 10,500 1,500 -0- 115,000 160,000 210,000 62,500 186,500 137,500 $546,500 $402,500 MIKOS INC. Statement of Earnings For the Year Ended December 31, 2021 Sales Cost of sales Amortization expense-intangible assets Depreciation expense-property, plant, and equipment Operating expenses Interest expense Earnings before income taxes Income tax expense Net earnings $865,000 $435,000 4,500 33,500 226,000 12,500 711,500 153,500 46,050 $107,450 Additional information is as follows: a. Land was sold for cash at its carrying amount. b. The short-term investments will mature in February 2022. c. Cash dividends were declared and paid in 2021. d. New equipment with a cost of $166,500 was purchased for cash, and old equipment was sold at its carrying amount. e. Long-term notes of $12,500 were paid in cash, and notes of $32,500 were converted to shares. Selected financial information for Frank Corporation is presented below. Selected 2020 transactions are as follows: a. Purchased investment securities for $6,800 cash. b. Borrowed $18,600 on a two-year, 8 percent interest-bearing note. c. During 2020, sold machinery for its carrying amount; received $13,700 in cash. d. Purchased machinery for $53,600; paid $10,800 in cash and signed a four-year note payable to the dealer for $42,800. e. Declared and paid a cash dividend of $11,800 on December 31, 2020. Selected account balances at December 31, 2019 and 2020 are as follows: December 31 2020 2019 Cash Accounts $88,600 $22,800 receivable 18,800 12,900 Inventory Accounts payable Accrued wages 53,800 63,600 8,800 13,600 payable 1,700 2,800 Income taxes payable 6,800 3,900 One-fourth of the sales and one-third of the purchases were made on credit. FRANK CORPORATION Statement of Earnings For the Year Ended December 31, 2020 Sales revenue Cost of sales Gross profit $436,000 286,000 150,000 Expenses Salaries and wages $52,800 Depreciation 11,000 Rent (no accruals) 7,600 Interest (no 14,000 accruals) Income tax 13,600 Total expenses 99,000 Net earnings $ 51,000 Required: 1. Prepare a statement of cash flows for the year ended December 31, 2020 by using the indirect method. (Negative answers should be indicated by a minus sign.) FRANK CORPORATION Statement of Cash Flows For the Year Ended December 31, 2020 Cash flows from operating activities: Add (deduct) items not affecting cash: Net cash flow from operating activities $ 0 Cash flows from investing activities: Net cash flow from investing activities 0 Cash flows from financing activities: Net cash inflow from financing activities Cash, beginning of 2020 Cash, end of 2020 0 0 $ 0 2. This part of the question is not part of your Connect assignment. 3. Compute the quality of earnings ratio and the capital expenditures ratio. (Enter your answers in numbers and not in percentages. Round the final answers to 2 decimal places.) Quality of earnings ratio Capital expenditures ratio Required: 1. Prepare a statement of cash flows for Mikos Inc. for the year ended December 31, 2021 by using the indirect method. (Negative answers should be indicated by a minus sign.) MIKOS INC. Statement of Cash Flows For the Year Ended December 31, 2021 Cash flows from operating activities: Adjustments to reconcile net earnings to net cash provided by operating activities: Net cash flow from operating activities Cash flows from investing activities: Net cash flow used for investing activities Cash flows from financing activities: Net cash flow from financing activities Cash and short-term investments, beginning of year Cash and short-term investments, end of year $ 0 0 0 0 $ 0